FORT MYERS, Fla., Jan. 29 /PRNewswire-FirstCall/ -- Chico's FAS, Inc.
(NYSE: CHS) announced today additional expense reduction programs that will
include the elimination of approximately 180 positions, or approximately 11%
of the headquarters employee base. This workforce reduction is expected to
reduce payroll and related benefit expenses for the Company by approximately
$15 million over the next twelve months. This event now increases the
Company's targeted expense savings goal for 2009 from $25 million to a range
of $35 to $40 million. The Company also said it would recognize in its fiscal
fourth quarter 2008 financial results, certain non-cash impairment charges net
of tax benefit, based upon unaudited, preliminary year end estimates that are
anticipated to be in the range of $11.0 million to $14.0 million related to
goodwill and $7.0 million to $9.0 million covering certain underperforming
stores.
"Chico's FAS has tremendous potential and a bright future, but like the
rest of our industry, faces the challenges of one of the toughest economic
environments in recent retailing history," said
David Dyer
, President and
Chief Executive Officer. "Accordingly, it is more critical than ever for us
to operate as efficiently as possible, while taking every measure to preserve
and build upon the great customer loyalty our brands enjoy and the ability to
implement fresh ideas and new product offerings that will help us improve
performance. As difficult as these actions are, we believe that with our
three strong brands, our continuing efforts to enhance the fashion content we
offer our customers coupled with the strength of our balance sheet, will
enable us to emerge from this difficult period well positioned for growth and
capable of delivering increased shareholder value."
In connection with these workforce reductions, which were accomplished
today, the Company will record an after-tax charge of approximately $2.9
million in its fourth quarter ending January 31, 2009 to cover personnel
separation costs. This amount coupled with the CEO separation agreement,
previously disclosed on January 8, 2009, brings the total separation costs to
be recorded in the fourth quarter to approximately $6.3 million, net of tax
benefit.
The non-cash impairment charges are primarily a result of the Company's
analysis of goodwill associated with the 2007 acquisition of twelve Minnesota
franchise stores, while the impairment charge on underperforming stores
results from the Company's ongoing analysis of historical and projected
individual store performance. The conclusion of this analysis may result in
the eventual closing of as many as 25 stores.
The Company is a specialty retailer of private branded, sophisticated,
casual-to-dressy clothing, intimates, complementary accessories, and other
non-clothing gift items. The Company operates 1,076 women's specialty stores,
including stores in 49 states, the District of Columbia, the U.S. Virgin
Islands and Puerto Rico operating under the Chico's, White House | Black
Market and Soma Intimates names. The Company has 619 Chico's front-line
stores, 41 Chico's outlet stores, 328 White House | Black Market front-line
stores, 17 White House | Black Market outlet stores, 70 Soma Intimates
front-line stores and 1 Soma Intimates outlet store.
Certain statements contained herein, including without limitation,
statements addressing the beliefs, plans, objectives, estimates or
expectations of the Company or future results or events constitute
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995, as amended. Such forward-looking statements
involve known or unknown risks, including, but not limited to, general
economic and business conditions, and conditions in the specialty retail
industry. There can be no assurance that the actual future results,
performance, or achievements expressed or implied by such forward-looking
statements will occur. Users of forward-looking statements are encouraged to
review the Company's latest annual report on Form 10-K, its filings on Form
10-Q, management's discussion and analysis in the Company's latest annual
report to stockholders, the Company's filings on Form 8-K, and other federal
securities law filings for a description of other important factors that may
affect the Company's business, results of operations and financial condition.
The Company does not undertake to publicly update or revise its
forward-looking statements even if experience or future changes make it clear
that projected results expressed or implied in such statements will not be
realized.
For more detailed information, please call (877) 424-4267 to listen to the
Company's monthly sales information and investor relations line
Additional investor information on Chico's FAS, Inc. including a
presentation summarizing the Company's recent financial results is available
on the Company's website at http://www.chicosfas.com
Executive Contact:
Robert C. Atkinson
Vice President
Investor Relations
Chico's FAS, Inc.
(239) 274-4199
SOURCE Chico's FAS, Inc.